He was the first Indo-American CEO to take a venture-backed company public on the National Association of Securities Dealers Automated Quotations (NASDAQ). Now US-based Kanwal Rekhi is back in India scouting for innovative start-ups for his company Inventus Capital to invest in. Considering venture capital’s (VCs) haven't had an easy ride recently, with investments in the country tanking by 30 percent last year, CNBC-TV18’s Vineetha Athrey finds out what is attracting serial entrepreneurs like Rekhi to India.
It has been a busy start to 2013 for venture capitalist Kanwal Rekhi. The Indian-American founder of Inventus capital has just tied up USD 71million out of the targeted USD 100 million for his second fund and plans to raise the remaining USD 29million by June this year. From its first fund, Inventus Capital had invested USD 52million in 18 companies. Two of which has already exited successfully and now with the second fund, the VC firm plans to invest ticket sizes of around USD 1-2million each in 20-25 startups across India and the US over the next 5 yrs.
Kanwal Rekhi, MD, Inventus Capital says, "We don't like capital intensive companies. We are typically first institutional investors in companies. We invest in tech startups, companies that use internet, ecommerce, software as services."
Infact, Rekhi who is now in India, has already signed term sheets with two Indian companies and expects to ink these deals by end of April. But even as he his team shortlist promising startups, they are aware the road ahead may not be all rosy.
Rekhi says the lack of good exit points and clarity regarding the Indian regulatory framework is indeed a cause of concern. "Rules are unclear and ever changing as we saw with Vodafone. Retrospective is the norm of the day and so investors are not aware of the rules. General Anti-Avoidance Rule (GAAR) we need clarity on what does this mean in terms of Mauritius," he adds.
Overall, Rekhi remains bullish about the entrepreneurship ecosystem in India. He is betting on disruptive tech startups to rake in the moolah.